In today's fast-paced business world, collaboration and integration are key to success. However, many companies still operate with internal departments working independently of each other, leading to a disconnect in processes and potentially hindering the supply chain. This is particularly true when it comes to financial planning and operational planning. In order to align the goals of both departments and optimize the planning process, it is crucial to bridge the gaps between financial planning and operational planning.

Traditionally, collaboration within the realm of sales and operations planning (S&OP) has been limited to sales forecasting, operations planning, and procurement planning teams. However, businesses are beginning to realize that true collaboration must involve the entire ecosystem of the organization, including key trade partners, throughout the entire planning process. By including all stakeholders, businesses can gain a more comprehensive understanding of the impact of their supply chain decisions at all levels of planning.

A lack of cross-functional decision-making can have detrimental effects on a business. Take, for example, a company that produces a specialized variety of deli meats. This particular product had low demand but required excessive inventory. Additionally, production costs were high and production time was slowed down. To address these issues, the company made the decision to halt production of the deli meat product. However, this decision inadvertently led to a decline in sales across all their other products in major metropolitan areas.
After conducting market research, it was discovered that customer loyalty had shifted to other deli meat companies when the trusted product was removed. This prompted the company to resume production and sales of the discontinued product, but this time involving every department in the decision-making process. This example highlights the importance of cross-functional collaboration to avoid unintended consequences and make informed decisions.

To create a connected and agile supply chain, businesses must ensure alignment between people, processes, and systems. This means that all operational groups need to plan in a unified manner to achieve the same overall business goals. By merging the metrics that measure supply chain effectiveness and financial success, businesses can minimize the gap between finance and operations. Through analysis of these combined metrics, informed decisions can be made to optimize both the operational and financial aspects of the business.
To facilitate this alignment, each department must work with the same components and have visibility into each other's plans. For example, if product development plans to introduce or remove products, these changes should be reflected in both operational and financial plans. Considerations such as potential profits, product cannibalization, distribution, and production costs should be evaluated by all groups involved. In addition, leveraging new technology can help eliminate disconnection between departments and ensure seamless integration of information and processes.

By removing siloed data and promoting effective communication, companies can position themselves for success. This requires connecting people, processes, and systems throughout the entire organization, including external partners. When every team is planning on the same page and working towards the same financial goals, adaptability and success become achievable.

Bridging the gaps between financial planning and operational planning is essential for businesses looking to optimize their supply chain. Through cross-functional collaboration, alignment of metrics, and integration of technology, businesses can achieve a connected supply chain that drives success. By breaking down silos and fostering collaboration, companies can adapt to the demands of the global marketplace and thrive in an ever-changing business landscape.